Cuttone and Co. Inc.

It’s ultimately all about the cash.

Sidelined cash has piled up in money market funds and in corporate coffers since individuals and corporations developed a serious risk allergy last fall and the world has been awash in cash since. In the last twelve months world governments have topped off the tank by issuing a nearly unfathomable amount of Benjamins, Maos, Elizabeths, Loonies and ..…..well, you get the idea. That sea of banknotes is now flooding into the market and it is floating an awful lot of boats. 

It’s a fairly simple proposition.  Excess liquidity begets inflation in some form

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Like a teenage runaway having second thoughts a mile or so away from home, the market contemplated economic life without Fed intervention and a sobering realization that improving economic conditions could lead to a scaling back of Uncle Ben’s support left traders feeling cold, hungry and alone. If the Fed stops buying 80 percent of new mortgages, the thinking goes, who is going to lend Mom and Pop the money to pay for that nice warm home? The prospect of higher mortgage rates combined with a weak existing home sales report was enough to convince many that life out from under the Fed’s

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Yesterday’s minor turbulence notwithstanding, the market has been climbing steadily skyward on the thermals of rising economic indicators and investors who boarded the rally while the recovery was merely a rumor have reaped impressive paper gains. Lately it appears that even Mom and Pop are beginning to get off the tarmac. In one of several signs that retail investors are reacquiring an appetite for risk, money market assets have fallen back to levels last seen in October of 2008 leading to speculation that Main Street has been fueling the latest leg of this up move.

Along with the

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As you are undoubtedly aware, Lehman Brothers failed one year ago today, the first of a series of grim anniversaries that will mark the cataclysmic events that saw the global financial system pushed to the brink last autumn. Most of us recall those unsettling weeks as a time when it seemed that our worst nightmares were coming true. Gallows humor was in full bloom and jokes about buying ammunition and canned goods expressed a deep underlying anxiety that society itself was on the verge of breaking down. A year later, the sun still rises in the east and the crisp days of autumn beckon,

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Historians believe that the Great Depression began sometime in 1929 and generally lasted until the outbreak of the Second World War, but I think they have it all wrong. To me the great depression is an annual event that occurs on the day after Labor Day each year. With the sweet days of summer behind them, millions will drudge off to work and school this morning in a deep funk. More than a few will have a Ferris Buehler moment and decide to stay ‘neath the covers. Can you blame them?

Traders who decide to stay home and extend summer one more day probably  won't be missing much, assuming

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Tuesday September 1, 2009

Oh it's a long, long while from May to December,

But the days grow short when you reach September,

When the autumn weather turns the leaves to flame,

One hasn't got time for the waiting game.

"September Song" by Kurt Weil and Maxwell Anderson   as popularized by Frank Sinatra

There is a strong hint of autumn in the air as traders return to their desks this morning. The chilly weather is a welcome relief from the hot and humid days of August, yet there are worries that this first day of September may also mark something of an end to our torrid summer romance with

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